The History of the Affordable Care Act

The ACA is a far-reaching health care overhaul that seeks to provide a route to insurance for the uninsured while also better protecting the insured from potential abuses. This cannot be done piecemeal -- it requires widespread participation by individuals, businesses and states.

Under the ACA, individuals and small businesses compare and choose private health plans on health exchanges. People also can use the federal marketplace to determine if they qualify for Medicaid or CHIP. To keep premiums and out-of-pocket costs down, federal subsidies -- based on household income and family size -- are available as tax credits to anyone who buys insurance through the exchanges (but see sidebar). To keep lower program costs, the law includes an individual mandate, requiring that most Americans have health coverage or pay a fee equal to (as of 2015) 2 percent of household income or $325 per adult ($162.50 per child), whichever is higher [sources: HealthCare.gov; Hossain and Quealy].

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Those already insured by a plan that existed as of March 23, 2010, could see their plans grandfathered in, at least temporarily, as long as the insurers in question haven't greatly cut benefits or raised subscriber costs. Job-based plans can enroll new clients, but individual plans can only keep whatever subscribers they had as of March 23, 2010. Grandfathered plans must meet some but not all ACA reforms. To qualify, they must no longer have lifetime limits or arbitrary cancellations, must allow adult children up to age 26 to remain on parents' plans, and must meet standards of transparency and health-care-related spending (as opposed to administrative costs). In practice, these rules are more complicated than they sound, and are further affected by, for example, whether the companies' will comply with ACA standards or simply cancel the policies [sources: HealthCare.gov; Hossain and Quealy].

The ACA also includes a controversial business mandate, which requires some companies to provide employee coverage or face fines of $2,000 to $3,000 per employee [sources: Bash et al.; Desjardins, Keck and Silverleib; Somashekhar]. But complications arising from required record-keeping have obliged the administration to grant deadline extensions to businesses. Moreover, many such companies are in the process of limiting worker hours or reducing new and seasonal hires to avoid having to offer the insurance -- a problem that has critics on both sides arguing that the business mandate be dropped. Doing so could cost an estimated $150 billion in expected fines over the next decade, money earmarked to help pay for individual subsidies [source: Somashekhar].

Meanwhile, businesses with fewer than 25 full-time employees who average about $50,000 a year or less in salary can qualify for a health care tax credit if they pay at least 50 percent of employee premiums [source: HealthCare.gov].

As Americans head into the Nov. 15, 2014, open enrollment period, many details, including the tax structure that will partially fund the ACA, are still being hammered out. Further technical trials await the exchanges, along with court challenges and continued political opposition. Thanks to the first round of enrollment, 8 million Americans have insurance now who did not have it before, but only time will tell if the trend continues, or if the ACA ultimately succeeds.

Another Supreme Court Battle?

Due to political opposition, state-level problems and a variety of other issues, only 14 states built their own insurance exchanges, leaving the federal government to cover the rest. But the law as written only subsidizes insurance purchased through "an exchange established by the state." Courts hearing challenges based on this wording have thus far have split over whether the federal government can subsidize states using federal exchanges, which could prompt the Supreme Court to take another look at the ACA. A narrow interpretation by the court could effectively gut the law, which relies on subsidies to make premiums affordable, and take away tax credits from more than 4 million people in the 36 states. The question then would be if the administration and Democratic leaders in Congress could summon the support to amend the legislation [sources: Liptak; Miller; Pear].